“Basically, probably we are just one day away from the previous all-time high, may happen anytime soon,” said Rahul Sharma in an interview with ET Now. “But the bigger point here is the markets are slowly factoring in the US trade deal. So eventually when it happens, it could be a classic buy on rumour, sell on news kind of a market where we may see profit booking happening on the day of the announcement of the deal with the US.”
Sharma noted that the markets may continue their upward momentum until an official announcement is made. “Until and unless the announcement does not come out, the inflow, the trickle of information would keep on coming which would possibly keep the bulls interested in the market, staying up,” he said. “Technically speaking also since we have crossed the 26,000 psychological level, a close above that today should open way for 26,277 which is the previous all-time high for the Nifty.”
According to Sharma, investors should “enjoy the party at least until the music is on,” but brace for a sectoral shift once the deal materializes. “The market could actually shift its overall positions from largecaps to midcaps. So, our big bet today is on the midcap space,” he added. “Largecaps could see profit booking once the announcement happens, that does not mean they are bearish, but yes, they could spend some time sideways.”
He pointed out that the midcap indices are showing strong technical formations. “If you see the midcap 100 index or the midcap select index, there is a beautiful cup and handle pattern on the daily charts of these indices which means that the next leg of rally could be coming in from the midcap space,” he explained.
On the banking front, Sharma said the Bank Nifty has been leading the show but appears overheated. “RSI is in the overbought zone, whether it is daily charts or hourly charts. So, it does not make sense to put fresh money or take fresh positions at this point in time as far as the Nifty and the Bank Nifty is concerned. But in case a dip happens, that could be a good opportunity to re-enter. So, it is time to be selective. Midcap is the space to be,” he advised. When asked about specific opportunities within the midcap segment, Sharma highlighted two names — GMR Airports and KFin Technologies. “There are two stocks which we like particularly from this midcap space. One of them is GMR Airports. Now the long-term charts are suggesting that the stock is at a very crucial fulcrum, a breakout of which is expected above 95,” he said. “The next leg of rally could very well begin from here and the stock could in fact outperform the space and probably head towards targets of 120 on the upside over the next three- to four-month timeframe.”
He recommended buying GMR Airports with a stop loss at 85 and a target of 120. “From a delivery perspective we are advising clients to buy GMR Airports at these prices, have a stop loss placed at a closing basis at 85 and invest for the next four odd months,” he said.
Sharma also sees near-term potential in KFin Tech. “KFin Tech has formed a very solid base around the 1050, 1100 area for many weeks now,” he noted. “Looking at the price action of the last few days, it is very much evident that the stock is trying to break out from the current consolidation which means 1200, 1240 is something that is very much on the cards.”
He advised buying KFin Tech at current levels with a stop loss at 1110 and a target of 1240.
Turning to the IT sector, which was the top performer of the day, Sharma observed that “it has been sort of being the underdog for a long enough time.” He added, “Finally, some bit of respite is coming. Having said that overall the structure of the IT index is still not out and out bullish, so maybe from a short-term perspective yes, the IT index could head towards 37,500 on the upside or maybe slightly higher as well.”
He attributed the rally to strong quarterly results. “Purely from a very short-term perspective, a bounce back is something what we are witnessing at this point in time. Yes, it is driven by what is happening on the results quarterly numbers,” he said.
Among IT names, Infosys stood out for him. “Infosys is the one stock, previous quarter also we saw good numbers, today again it is seeing good price volume action on the charts,” Sharma said. “The next visible target for the stock is in the vicinity of 1600, 1620. So, one can look to buy Infosys at these levels, maybe around dips around 1520 as well, have a stop loss placed at 1500 and a good 5% to 6% jump can be expected from current levels.”
As the Nifty edges closer to uncharted territory, Sharma’s message to investors is clear — enjoy the rally while it lasts, stay selective, and watch the midcap space for the next phase of market leadership.